CapitaLand inks JV to acquire 70% of Shanghai Tower for $546.3m

The JV partners will own 41,773 sqm worth of space in the property after the transaction.

CapitaLand entered a 50:50 joint venture with an unrelated third party to buy about 70% of Pufa Tower in Shanghai for $546.3m (RMB2.75b), an announcement revealed.

Pufa Tower is 34-storey tall with three basement levels of car park. Post transaction, CapitaLand and its JV partner will possess levels 8 to 19 and levels 21 to 32 with a total gross floor area (GFA) of 41,773 square metres (sq m), as well as 61 car park lots with property title.

The firm revealed that the property is deemed as a seed asset for a value-add fund that CapitaLand is setting up to invest in commercial real estate across Asia’s key gateway cities. The transaction is also said to be the firm’s first office property in the core Luijiazui central business district (CBD) in Pudong New Area.

“Continual high demand for quality commercial properties in China’s top tier cities, coupled with low supply, have made the renewal of ageing commercial assets a compelling investment strategy in these markets,” Lucas Loh, President (China & Investment Management), CapitaLand Group, said. “We see significant potential in enhancing its asset value by upgrading specifications, tenant mix and improving operational efficiencies.”